Materials Management Intro, Definition, Functions, Objectives, Stages, Factors responsible, Importance.

Material Management. Material includes all the things from raw material to semi-finished and finished goods. It has great significance as it has direct relation with the efficiency of a system. Generally every manufacturing unit has 25% to 75% of sales turnover investment in materials. Which makes it critical part.

Material Management. Expense made on Materials is invested in inventories, storage, transportation, insurance etc. Previously only Marketing and Manufacturing were considered as important activities of an enterprise. Material management has gained its importance due to costs involved and economizing the total activity. Material Management is basic function of business that adds directly to value of product.

Definitions. Material Management is a term used to connote “controlling the kind, amount, location, movement and timing of various commodities used in production by industrial enterprises.” Material Management is a basic function of the business that adds value directly to the product itself. Material management deals with controlling and regulating the flow of material in relation to changes in variables like demand, prices, availability, quality, delivery schedules etc.

Material Management. MM covers various aspects of input process, like it deals with Raw-Materials, procurement of machines, other tools and necessary spares for the maintenance. MM is preliminary to transformation process. It involves planning and programming for procuring of material and quality goods of desired quality and specification at reasonable price and at right time. It involves being up-to-date with market information, stores and stick control, inspection and transportation of materials.

Functions of Material Management. The responsibility of material management ends only when the correct finished product in proper condition and quality passes to the consumer. -Bethel General Electric Company (G.E.C) of USA, pioneers in the field of material management listed the functions of Material Management under the following heads:-

Functions of Material Management. Planning and programming for materials purchased. Stores and stock control Receiving and issue of material. Transportation and material handling. Disposal of Scrap and surplus material. Value engineering and value analysis.

Objectives of Material Mgt. Material selection. Low operating costs. Receiving and controlling materials. Issuance on receipt of app. authority. Identification of surplus stock and take measures to reduce it.

Organization of MM department. The Materials manager has 4 important duties. For which he appoints managers under him, viz. Purchasing. Production Control. Inventory and stores control. Physical distribution.

Stages of Material Management. Decision Stage. Sourcing stage. Production planning stage. Stage of ordering. Receiving stage. Inventory control.

Factors providing Economy to MM. Volume of purchases. Plant near the source of Materials. Fluctuations in prices of Materials. Design and engineering of product. Design of equipment. Pre-Inspection of material. Specialized agency for purchasing.

Importance/Advantages/Benefits Regular supply is ensured, aiding for uninterrupted production process. Procurement and transportation costs can be controlled and checked. Efficient stock and stores control minimizes waste. Pre-inspection of RM minimizes chance of rejection of final product. Timely supply and other inputs is ensured.

Importance/Advantages/Benefits Best utilization of labor, capital and equipment is ensured. Congestion in stores and confusion can be avoided, resulting in better services. Manufacturing Cycle is reduced to min. Slight changes in material costs, changes the profit statement of the co. Shortages can be eliminated.